I'm the CEO & Co-Founder of Birchbox. Here's how I started and scaled my beauty company – Katia BeauchampFeatured
Hi everyone! I’m the CEO of Birchbox and I co-founded the company in 2010 to create a better way to discover and shop for beauty. There are hundreds of thousands of new product launches a year and for most of us, those endless options are overwhelming and intimidating. At Birchbox, we believe that even if you're not obsessed with beauty and grooming, you still deserve to get the best stuff. Our idea was to make the most of your (limited) time by giving you an efficient, effective and enjoyable way to test-drive and buy new products. We quickly found product-market fit and hit our 5 year targets in 7 months. We then expanded overseas, introduced Grooming, developed two beauty brands of our own, and launched retail experiences - including our most recent initiative, Birchbox at Walgreens, which we're continuing to grow.More about me: I’m originally from Texas. Before founding Birchbox, I worked in finance and commercial real estate. I have an MBA from Harvard and a BA in International Studies & Economics from Vassar College. I have four children, ranging in age from 9 months to 5 years old.Ask me anything about being a first-time founder, starting and scaling a company, the beauty industry, delving into physical retail as a digitally native brand, or something else!
Thanks so much for making the time to chat, Katia!Katia will be answering questions this Friday, so submit your questions before then. She may not have time to answer every question, so please upvote your favorites.
A couple of questions:1. When did you know that your company was really taking off versus just being an early stage test?2. How do you approach hiring? More specifically, as a startup there's a need to keep salaries low, but then it's hard to attract high-quality people. How did you evolve on this as your business evolved?
Initially, non statistically significant customer feedback really made me a believer. I extrapolated almost immediately that “this is working” though the number of customers was not large 😂. A good sign was also that we were earning more money than we were spending. From there we started setting targets for growth and beating them consistently. That definitely built some level of confidence. All that being said, I think we always knew that something “in” today could go “out” tomorrow. It kept us pushing hard. In the early days, we offered the more experience talent less cash than they could make at a more established co, in return for equity. We have increased our comp over time, but we still aren’t trying to match major established companies with much larger packages and perks. We rely on people wanting to work in the environment we’ve created and on a big motivator being the vision for the company and the opportunity to build something very different in the giant beauty industry.
@katiab thanks a lot. I really like your first point about looking at your customer feedback and profitability. These two are not a given! I think it's sometimes hard to know how well you are doing when you are still scaling and seeing much much bigger players having a huge reach.On the second point, it seems to be the approach with most start-ups. Are you finding that you are able to get top notch experienced talent in any case or you have to settle for more junior people and build up their skills.
First time successful founders are always an inspiration.I would like to know what do you think the future of beauty/lifestyle subscription boxes is? How do you reconcile it with the minimalist- eco-friendly trends? Do you think there is still room for new players and why/how? Apart from a few big players (Birchbox, MyLittleBox in France) it seems that a lot of the projects have failed. Why is it so in your opinion and how are you pivoting (or are you pivoting at all) at Birchbox to remain relevant.
My perspective is that subscription is a tool, and a revenue model, and the longevity of it as those things I have no question about. Subscriptions have been around for a very long time from the perspective of “of the month club”, or replenishment subscriptions. Our use of subscription is different because the idea I that the subscription transaction leads to the shopping transaction. Subscription is a tool in discovery; in limiting the option set, providing and opportunity to focus, and creating a cadence of discovery that feels both exciting and manageable. Regarding the movements you mention to consumer less, birchbox was actually started very much with that in mind, and we still think about it all the time. Our perspective is that there’s a lot of waste that happens in beauty from buying products you don’t actually love and then building a sort of product graveyard (all those half used shampoos in the shower). Our belief is that you should KNOW when you want to invest, and buy products that you will use until they are done!Relevance is an obsession. We continue to evolve and ask more of what we can do to live at the intersection of utility and delight, for an everyday beauty consumer (we don’t focus on the consumers who love beauty, because we feel they are well served). The biggest shifts we are making are coming from understanding that everyday consumer and how their needs are not being addressed. It’s led us to our partnership with Walgreens, as well as changing the entire positioning of the company to explain that we are not a product/brand centric beauty retailer; we are a human centric beauty retailer.
I'm curious about two things:1 - How did you focus and organize your time in the early days of Birchbox? And what practices or methods would you recommend to other founders to stay sane?2 - What's something that you wish you'd invested in sooner in starting and scaling the company? (e.g. a critical hire, technologies, specific processes, partnerships, etc)
1) do not let your inbox run your days. Set clear priorities weekly and look for the emails that are related to that. Expect your inbox to get out of hand, and try to develop a system that keeps you calm about it, while still obiding by not spending all your time emptying it. For example- an agreement from team members about subject lines, or giving you a deadline to respond. 2) internal tools to make the humans on your team (who are the most important asset) more productive. providing them context allows you to expect that they will set solid targets, make decisions and really be empowered.
Thanks for making time to help us, Katia--it means a lot. I'm curious as to how you handle conflicting advice from people you respect. I'm in the fundraising phase right now (first raise, pre-product) and everyone has their own opinion. I'm doing my best to check in with myself and see what resonates, leave the rest, etc. But wondered what that was like for you and if you have any advice on how to navigate it. From founders I know who are further down the path, I hear this only gets worse. Ha.
Such a great question- there’s always conflicting advice- right? I think it’s valuable to reframe the way you think about asking for advice. The shift is from getting a specific answer to act on, to gathering perspective and using it to come to your own decision. Asking people for the context that shapes their advice can be helpful to you too. There are so many variables, nuances, etc that just asking someone something like “how should I value my company” would yield such a wide range of answers. Asking the people their assumptions/experience that shapes their perspective can help you navigate.
Thanks for sharing your thoughts and advice with us especially given your busy schedule. Quick question: How has the way you've considered the competition different now from when you first started? How do you stay competitive? Early days, we're always told to stay focused on delivering value, differentiating, etc. but as copycat players enter the market (especially as you grow), I imagine the strategy and thinking changes. Would love to hear your thoughts. This is what keeps me up at night.
Competition scared us early on, but luckily we were too busy to dwell. When we pulled up later, I had a realization- competition does copy the physical manifestation of the insight, but they don’t understand the insight you have. And as long as you still see that insight as relevant, then it drives how you adapt to a changing market (competition can change the market). I’d be careful not to knee jerk from what you see, but I also think it’s okay to pay attention and try to understand the insight of your competition.
That is wonderful advice about insight which, I think, is often overlooked when we talk about what helps us stay competitive. I had people asking to see our early market research, etc. and I'm glad I held that data close. The insights from that early research helped inform our initial product and initial target customer segment.
Hiya - congrats on all your success, your hard work is inspiring! I had a question regarding Market and Customer Research. How did you manage to acquire the information you were looking for when conducting market and customer research in order to proceed with your product/organisation? Was it through funding, bootstrapping etc? And what methods did you use to ensure you had quality and quantity in participants.
What were your main challenges reaching the tipping point for Birchbox? I find that marketing is usually the most difficult part for startups after the initial MVP is created. What are your suggestions for scrappy ways to get the word out?
Our main challenge was supply. The beauty brands were intrigued but it was difficult to get them to scale to the samples we needed as quickly as we saw demand growing. We worked so hard to understand how we could become invaluable partners to our brands. Lots of listening and iteration. Still iterating😊
I remember seeing you on the MSNBC show Follow the Leader. It was so clear how much you care about customer insights and building something that matters long-term. Question: What is one of the biggest insights or solutions you found and implemented to help increase customer lifetime value and keep retention as low as possible?
This is a complicated question, but i think there’s some straight forward insights. First, I think it’s inportant that you work to set expectations in order to find customers that want what you’re selling. Sounds obvious, but I think it can still be valuable to keep in mind. be thoughtful about how you use promotions, understanding the customer quality and how that is impacted by various promotions is valuable in driving LTR
Wow, Katia! Thanks so much for taking the time out of being a mom, wife, CEO, co-founder, FFC partner and more, to chat with us! It's been amazing to see Birchbox evolve through the years and hearing you open up authentically about the challenges you've overcome. I have 2 questions - a serious one and a fun one.1. I'd love to hear about the transition from digitally native to physical retail - how did you decide this would be a good direction for Birchbox, and what do you think will be next for brands born online?2. Any podcasts or books you're really into? (Children's books are allowed. Haha)
1) two things drove this. First, we are focused on a psychographic- the everyday beauty consumer;someone not obsessed, driven by purpose and not passion. We see the opportunity to build THE destination for that consumer, and in order to do that we knew we had to think multi channel. The other reason is that we think there’s an opportunity to acquire customers through retail, diversifying our tools for growth. 2) love intelligence squared podcast! Daring Greatly (book) was an eye opener for me. Fave kids books are Gerald and pIggie ones- anyone else?? 😊
- What are the most important lessons you've learned about pitching over your career? What common mistakes do you see others (especially women) making?- If you mentor other women, what attributes signal to you that someone is worth investing time in? What makes you more likely to mentor someone vs. less likely?
Thank you for taking the time to give back to the women founders' community! I'm Dr. Sophia Yen, CEO and Co-Founder of Pandia Health, we bring prescription birth control to women wherever they have internet and a mailbox. We are the ONLY Women-Founded, WomenLed, practicing reproductive health DoctorFounded, DoctorLed, company in the birth control delivery space. 1. How did you put together your advisors? How many advisors did you have? How often did you utilize them?2. What was your customer acquisition strategy? How much paid advertising and what platforms? and how much PR? or other?
A year ago I launched Prow Wear, a sustainable fashion line in Istanbul, Turkey. I am a faculty member in environmental engineering, therefore, I am not very knowledgeable about brand management. We are having hard time to reach out to our target group internationally, which is productive, practical working women. We are affected by local politics closely due to high production costs since we are working with smaller scales compared to fast fashion brands like Zara, H&M, etc. Do you have any suggestion to new and small brands to survive financially during the first couple of years?
Hi Katia, thank you so much for your time and energy :)Here's a question from one of Elpha's Instagram followers:I'm multi-passionate. Was just reading "Tech Boss Lady" by Adriana Gascoigne and she brings up the fact that some people need to be constantly stimulated, which resonates with me. How do I take charge of this trait?
Hi Katia ,Congratulations on your success. I met you last year at Harvard Hall and you gave an excellent speech. I am also in the beauty industry and we are in haircare and we will be getting into skincare.I’m at a point of scaling my business to the next level. As an entrepreneur, at what point is the right time to get investors?
Thank you Katia, you're amazing! I'd like to ask how did you achieve so impressive number of customers after launch? I'm a founder of mobile app for nail polish lovers and as I'm building a community it's a very important question for me.And the second question: what is the best way to reach out cosmetics brand for cooperation? Thanks in advance!
How did you get a deal with Walgreens? Is this something where you were building relationships with retailers and proposed the idea (since it hasn't been done before) or did they approach you to do something and thought of this novel idea? I'm always curious how that kind of stuff happens. It will likely expand your demographic market so how neat!
Thanks for making the time. It means a lot to fellow female founders. My questions: 1) At what point did you decide to incorporate physical retail into your strategy? Was it growth, a need, an experiment? 2) What physical retail channels do you recommend for similar DTC brands? A very common and popular one : pop ups.Asking these questions since we work with DTC and physical retail brands. I'm the founder and CEO at GoGoGuest, a SaaS intelligent marketing automation.
Thanks Katia for taking the time help us figure all of this out!I am currently in the beginning process of my business -- accelerators, pitching, applying feedback and getting back on the horse and starting over again. My business would sell a specific commercial product to women (in which I am in the the patent process for). While I feel my market is broad, I would like to begin by marketing/targeting 3 customer profiles but most (male) coaches want me to go more niche when discussing my target market. How did you determine your customer? Was it post launch validation? Focus groups? I tried surveying and that seemed to not appease the panel gods lol. Any and all advice would be greatly appreciated!
Hi Katia, Thanks for taking the time to do this! Wondering:1. How did you reach out to your first few suppliers, e.g. skincare brands to start giving you products for free? 2. How was the growth rate like for your first few months on getting new users? Did you have to do a lot of marketing to get the word out, or was it minimal and people just started talking?Cheers! x